Académique Documents
Professionnel Documents
Culture Documents
INDUSTRIAL RELATIONS
Compiled and Edited by Amit Rai
Overall guidance by Dr. D.K. Srivastava
SR. NO.
1
CONTENT
INTRODUCTION TO INDUSTRIAL RELATIONS
PAGES NO.
2
13
22
35
49
10
COLLECTIVE BARGAINING
27
COLLAR
59
66
74
TOPICS in IR:
1. Discipline of Industrial Relations
2. Approaches of Industrial Relations
3. Global Face of Industrial Relations
4. Overview of Industrial Relations in India
5. International Labour Organization and Labour
6. Trade Unionism theoretical framework, Labour Movement, Functions
of Trade Unions
7. Trade Union Organizations Central Trade Unions in India
8. Managerial Unionism
9. Labour Management Relations Anatomy of Strikes and Lockouts
10.
Managing grievances and Conflicts
11.
Managing Discipline at Workplace
12.
Collective
Bargaining:
Contemporary
and
comparative
Experiences
13.
Negotiated flexibility in Indian Companies
14.
Employers rights and Obligations
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15.
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LECTURE 1
INTRODUCTION
IR deals with the relationship that exists between the Employees of an organization and the
management. It is generally in reference with the shop floor and a typical factory environment.
The workers, the trade union and the management are the basic parties to it, and it finds its most
important application in case of industrial disputes. The usual terms that are used in the same
context are:
Collective bargaining
Negotiations
Lock-out
Strikes/Gherao
Go-slow
The government plays an important role in it, be it through its policies or its representatives like
the conciliation officer or the labour commissioner. In the present day scenario, IR is losing its
relevance because of the advent of information technology and the service sector becoming
dominant. Its dispensability still cant be questioned as it clearly showcases the success of HR
policies at the grass root level.
ORIGIN
IR is the most primitive form of Personnel Management, which dates back to the 18 th century. Its
relevance is right from the 1769, when James watt had fought for the patent of the steam engine.
IR borrows its basic principles from various disciplines e.g. Economics (wages, bonus, monetary
benefits), Law (labour laws), sociology (Trade unions and their social framework)
In the last two centuries, there have been three inter related revolution which marked the
evolution of IR into its present form. The three revolutions are:
Industrial Revolution
3
Democratic revolution
Capitalist Revolution
PRE INDUSTRIAL REVOLUTION ERA This refers to the era before the industrial
revolution, when there were no formal industries. The basic features of this era were as follows:
The working hours were long, and had no consideration for fatigue or loss of efficiency.
Relations between the master and the craftsman were personal rather than professional.
INDUSTRIAL REVOLUTION brought about a transformation in the economic and social life.
It began in the UK and then soon spread to France, Germany, and the USA. This period is
extensively marked by the studies made by Taylor and his principles of scientific management.
The salient features of the industrial revolution were:
It was driven by a series of connected events, which brought about innovation and
technology in the factory premises, replacing manual labour and redefining the ManMachine relationship.
The concept of factory came to existence and a lot of experiments were conducted to
increase productivity. Now the focus was on efficiency.
Brought about the concept of free labour market i.e. commoditizing labour.Before, the
supply side was governed by some groups and unions and the markets were generally
held by master craftsmen.
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Democratic revolution was the next important event to have impacted IR. It started in 1750 in
UK and then spread to USA and then France. This revolution brought about a change in the
political governance of the countries. These Countries moved from colonialism to different
arrangements. The salient features of the Democratic revolution are:
There was an increase in social concerns for human rights. During the industrial Revolution as
human rights were suppressed and workers were not allowed to voice their opinions. The
Democratic revolution changed the way workers were treated .The countries where unionization
was banned and considered a sin, changed and took to the new norms e.g. In Germany, Trade
Union was not accepted before the democratic revolution and the same goes for USA, where
trade unions were banned in certain sectors.
The last revolution that changed industrial relations was the Capitalist Revolution. There were
certain changes in the society after the revolution:
Private Ownership of means of production and their use for personal profits
Freedom of Contract
With Capitalism came the division of the society into the rich and the poor or the employer and
the employee. Thus capitalism added a negative flavor to the social structure and thus arose
certain conflicts. The effects of Capitalism can be categorized as follows:
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POSITIVES:
Capitalism has increased the basic indicators of well-being i.e. Life expectancy, Real per-capita
income, working hours, working Conditions.
NEGATIVES:
Adam Smith, Father of Economics, proposed the Laissez Faire, the theory of invisible hand in
which he outlined the concept of free market. The free market while appearing chaotic and
unrestrained is actually guided to produce the right amount and variety of goods by the
industries, the conglomerates, which at that point were getting organized.
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LECTURE 2
CONTEXT OF INDUSTRIAL RELATIONS
1. Macro (Industrial Revolution, Democratic revolution, Capitalist revolution)
2. Micro
MICRO CONTEXT:
The 2 main contributors in the micro context were:
1. Academic Disciplines/ Institutions
2. Personalities /Thinkers
Adam Smith and Karl Marx were the two main contributors in this regard.
Fact File: The colour red denotes love and affection but it also stands for aggression and
power! Thus this was the symbol of the unions as its the colour that absorbs all the
energy and also denotes unity which is power!
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EARLY CONTRIBUTIORS
The era starting 1897 marked the contributions of early thinkers (considered as ICONS)
who shaped IR.
PERIOD 1930-1955
It marked new reforms and introduction of government regulations which redefined IR.
(Earlier the contribution of government was not very significant).
The period of 1932-1944 presented extreme trends of unemployment. 1932 saw the
highest unemployment rate and 1942 saw the lowest unemployment rate. It is referred to
as the worst up and best down.
The economists study of new market fractions and operation of labour markets.
The field of benefits (Should only wages be provided or even some benefits?)
Internal pattern and rules for the movement of workers(movement between branches,
transfers etc)
Thus todays IR has evolved from what emerged during this period.
ERA OF REFORMS (1950-1970)
Labour economics
Expansion of Business Schools (Harvard B Schools, Other Schools in US) and a new
pool of management thoughts emerged.
This was explained well in the IR systems approach (1954 and 1993 Dunlop)
QUALITY OF WORK LIFE
WAGE
GOVT. REGULATIONS
IR CONTENT
BENIFITS
HR is business centric
IR is different for different regions or industries and cant be copied as a generic template.
HR on the other hand has certain aspects that can be replicated irrespective of the region
or industry.
Efforts-Rewards correlation
APPROACHES TO IR (THEORIES)
Nature of Employment Organization
1. UNITARY APPROACH
Assumptions
Capitalist society
Integrated group of people
Nature of Conflict
Resolution of Conflict
2. PLURALISTIC APPROACH
Assumptions
Nature of Conflict
Resolution of Conflict
Legitimate
Internal and integral to work organizations
Accepted
role
in
both
economics
and
managerial relations
3. MARXIST APPROACH
Assumptions
Capitalist
Division between labour and capital
Nature of Conflict
Resolution of Conflict
Role of trade union
and
mobilization
of
class
consciousness
Develop political awareness and activity
APPROACHES TO IR
The regulatory output of Industrial relations is generally seen to be Rules. The rules may be
differentiated based on:
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LECTURE 3
Capitalist society
Integrated group of people
Common values, interests and objectives
Nature of Conflict
Resolution of Conflict
Coercion
(if accepted)
UNITARY APPROACH:
PLURALISTIC APPROACH
Assumptions
Nature of Conflict
Resolution of Conflict
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Legitimate
Internal and integral to work organization
Accepted role in both economic and managerial relations
MARXIST APPROACH:
Assumptions
Capitalist
Division between labour and capital
Imbalances and inequalities in society
Nature of Conflict
Resolution of Conflict
Change society
Pluralistic Concept
Unitary Concept
Marxist Concept
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Input-Output
Control of Labour
Processes Systems
PLURALISTIC CONCEPT: Input Output Model
Pluralistic concept is the Systems model of Industrial Relations. A System could be a computer
system, nature etc.
Input-Output Model is a rule making device. In this model, for every problem, a rule is made to
solve it.
Problem
Rule
100
100
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Safe value for ideology = 0.7, where ideology is trust, credibility and transparency.
Scale for IR climate = 1 10
If you bring new machines the IR climate will change.
7 * 0.4 = 2.8
ACTORS OF IR: Unions and Government, Management. Union is not necessary any kind of
representation will suffice. In HMSI management was critical of the workers. It was their
ideology.
CONTEXTS OF SYSTEM: The Industrial Relations system is an open system and has to be
studied in the context of external factors like technological characteristics of the workplace and
work community. The type of workplace and work operations largely depend on the technology
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adopted. Market forces or budgetary controls, locus and distribution of power also play an
important role in determining the dynamics of the Industrial Relations system.
ESTABLISHMENT OF RULES: Industrial Relation is the system which produces the rules of
the workplace. Such rules are the product of interaction between three key actors
workers/unions, employers and associated organizations and government. There has to be a
procedure for establishment of rules, the rules should be substantive and a procedure should exist
for application of these rules.
IDEOLOGY OF AN IR SYSTEM: Management, Union, and the Government possess a shared
ideology that defines their roles within the relationship and provides stability to the system.
Ideology is a set of ideas and beliefs commonly held by the actors.
MARKET: Industrial Relation system is constrained by the market situation. The various market
related factors that impact this system are:
Competitive position
Size of enterprises
Job content
POWER:
The economic/political power dynamics present in the Industrial relations system determine the
following:
Public policy
MARXIST CONCEPT
Control of the labour process: Social relations which workers enter into to produce useful
things becomes a capitalist labour process when the capacity to work is utilized as a means of
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producing value & thus on the unique characteristic of labour as a commodity. You dont reinvest
in labour or hijack labour by money.
UNITARY CONCEPT
HRM Approach
Emphasis on co-operation
Avoiding unions
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LECTURE 4
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EMERGING TRENDS:
1. Industrial Disputes are declining relatively worldwide but the speed of decline varies
from country to country. This is so because Industrial Relation varies from region to
region.
2. The number of strikes and lockouts are falling because Unions and workers have
distances themselves from this stance.
3. Numbers of workers involved in strikes have increased but mandays lost have decreased.
The formula used to calculate the number of mandays lost is as follows:
Industrial Dispute* Workers involved= Mandays lost
The above point (number 3) can be explained by this formula by stating the following reasons:
a. The number of Industrial Disputes have fallen more than the increase in the number of
workers involved.
b. The duration of disputes/strikes have decreased because the issues are being sorted out at
a faster pace.
It was felt that the duration of disputes was an important factor to be taken into account when
calculating the number of mandays lost. Keeping this point in mind, the above stated formula
was modified into:
Industrial Disputes* Workers involved* Duration of Dispute = Mandays lost
EXPERIMENTS OF WESTERN/INDUSTRIALIZED COUNTRIES:
1. U.K.: Birthplace of Industrial Relations, it followed a mixed approach
2. U.S.A.: Free labour relations
3. Japan: State-regulated labour market
The United Kingdom: Industrial Relations in Britain had the following features.
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SALTING: A union could not be recognized in the U.S. unless 51% workers support
it. Thus, unionized workers from outside used to join the company and educate
workers about their rights. This technique was used to get a union formed within
the company.
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LECTURE 5
FACE OF IR IN JAPAN: DISCUSSING IR ISSUES IN ASIA
While USA is struggling with a large count of unions, UK has just one union and almost no
strikes. In USA and UK lot of individualism has started happening, therefore industries are being
decentralized.
Some characteristics of work force and labor unions in Japan are:
1. Japan is the best example of enterprise level Union.
2. Due to long-term employment in Japan, the unemployment rate is low.
3. Japan also boasts of high HDI (Human Development Index).
4. Labor Force Structure(96):
Labor Force
Annual Growth (80 to 96)
6.7 Million
1%
29
LFPR Male
Female
Unemployment Rate
HDI (2006)
Human Poverty Index (98)
GDI
Union Membership
Union Density (%)
64.4
43
3.2 %
0.949
11.2
0.916
1.2 millions
18.6
FUTURE ISSUES:
1) Job security and employee practices: Though Japanese employees prefer long term
employment, post globalization with privatization of Japanese banks HR have a dilemma
of choosing between national and international interests.
2) Labor Shortage and Issue of Foreign Labor: Japan is anti immigrant by policy and
stops immigration of skilled labor. However in order to counter the shortage of semi
skilled and unskilled labor migration of these labor have been allowed from India. Also
worth noting here is the fact that Japanese organizations are generally small and do not
involve in large scale production or heavy industries.
3) Technological Innovations: With technological changes the emphasis on machines is
increasing and the balance is shifting towards skilled labor in favor of unskilled ones.
4) Labor Market Flexibility: The labor market is also quite rigid with 90% jobs for skilled
labor.
5) Small and Medium sized enterprises: It is worth noting here is the fact that Japanese
organizations are generally small and dont involve in large scale production or heavy
industries.
6) Japanese companies are competitive in terms of cost, quality, and time of delivery and
have become a benchmark internationally. The current emphasis is on corporate
governance with IR actors initiating collaborative measures over conflict.
3.
4.
5.
6.
need.
7. Work place relations- greater accountability. The IR-ER relation is bilateral in nature.
Previously the reigning which showed lack of trusts has been replaced by more
meaningful dialogue now.
8. Changing context and role of actors of IR - The current emphasis is on corporate
governance with IR actors initiating collaborative measures over conflict.
GLOBAL ISSUES:
1) Decent work
2) Quality of work life
3) Organizational Safety and Health (OSHA)
4) Migration
5) Standardization
6) CSR
7) Human Rights
8) Work Life Balances
9) LABOUR Market Reforms
10) Collective bargaining to partnership
11) Right Issues VS Interest Issues - Singapore model of management where workers/unions
are allowed to discuss only wage issues but issues regarding worker rights like
promotions etc. are not discussed
Independence of Enterprises
32
Signs of Adaptation: With the advent of globalization, western countries too are
focusing away from labor-intensive techniques. In place of importing people the
business is being exported to other countries where unskilled jobs can be outsourced.
However the strategic core activities of the business still remains at the location of
origin of the business.
(e.g. electronics). An environment of extremely tight labor markets and headlong growth
in electronics has driven a shift away from a low cost focused IR regime to a more skills
development focused HR system and is reflected in both policy and practice.
4. Pluralistic decentralized model - The Philippines model is the decentralized model.
Temporary and sub contract labor models are more visible here unlike in Singapore,
Malaysia where such arrangements are absent. Union voice is low at workplace level and
national level. Sub-contracting of labor, working on temporary basis. Less than 6lakh
workers are covered under collective bargaining contracts. Limited enterprise based
collective bargaining in large firms and public sector, with tripartite negotiations on
minimum wage fixation. Union avoidance policies, particularly in foreign dominated
export oriented electronics sector, coupled with union suppression during martial law
years.
5. Politicized multi-union model India and Bangladesh are examples of this kind of
model where we do not have a single union but several unions running at different levels,
regions, areas, factories at one time.
6. Transitory model China and S. Korea are under observation in the phase of transition.
China, Korea have recently transformed their IR adopting a more flexible approach. In
recent time, even Singapore has transformed itself going from production of low ended
products and moving away from the low cost export country image to a high cost quality
product country.
Productivity first appeared in the 8th 5year plan, prior to which its prominence was low. Now it is
of national importance given the present times. Vocational skills make up 5 % of the skills
required in a 15 to 25 year old. A second national committee was constituted to review the labor
laws.
The eleventh 5-year plan constitutes of the following:
Protecting environment
Good governance
1.
2.
3.
4.
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LECTURE 6
INDUSTRIAL RELATIONS IN INDIA
LABOUR FORCE STRUCTURE
Features - Availability of unskilled & cheap labour, presence of rigid labour laws
In India, Unions operate at 3 levels (which is not a common practice in other countries)
1. Company
2. Industry
3. National level
National Union cannot function directly at the company level. The only way for
this to happen is when company union is affiliated to the national one after paying fees.
Eg: INTUC can get themselves seen by giving affiliations to the unions at company level
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Unions started in 1875 abd in India, it came in 1920 (both at national and at company
level)
AITUC (All India Trade Union Congress is a central trade union that was founded in
1919
Madras Textile Union, a union at the company level was formed by B.P Wadia in 1920
Initially, unions were in labour intensive sectors including textiles, coal & mines,
railways and construction
Unions
Membership (enterprise level) 2002
6.9 million
Density (Organised)
25%
4%
68,544
12
Employers
Bureau of Public Enterprises and respective ministries regulate public sector undertakings
Government
Structure of Labour Governing Body in India
Ministry of Labour
(MOL)
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CIRM
ILC
Indian Labour
Conference (meets
once a year)
Apex Tripartite
Committee
Central Labour
Commissioner
SLC
Standing Labour
Committee (meets
frequently)
Apex Tripartite
Advisory Committee
Regional Labour
Commissioner
Deputy Labour
Commissioner
Asst. Labour
Commissioner
Labour Officer
To facilitate
conciliation
Labour
Inspector
Trade Union
Inspector
Factory inspector takes care of Health, Safety, Working Conditions and Welfare of
workers
The 10th five-year plan focus points from Industrial relations point of view include:
Workers Welfare
Child labour
Social Security
Protecting Environment
Good Governance
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Man days lost due to Strike and Lockouts (in millions) during 196165 to 2000-04
Post emergency and pre-liberalization, period of around 15 years (1977 to 1989-90) was
a turbulent time in the era of Industrial Relations
This is indicated by the stark increase in strikes and lockouts in the period
Lock-outs increased vis--vis strikes for the first time in the history of IT post
liberalization in 1990-91
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The time period from 1990 to 2005 is taken up to study the pattern of disputes in this period.
Observations indicate that industrial disputes reached more then 1700, during 1991 as the era of
change just started, labour was not ready to accept the changes made by government or by
employers. Also employers had rigid strategies.
The period from 1991-95, witnessed a steady decline in the number of disputes as it was the
post-globalization era and in 1995 it came as low as 1106, because the issues raised in this period
were addressed and settlements were brought about.
Again during 1999 number of disputes increased due to a complete change in work style. The
effect of globalization had now become apparent.
Post 1999, the number of industrial disputes declined owing to the effective participation of
unions in the management which changed the paradigm of industrial relations. The employers as
well as the workers felt the presence of competition and the work became more performance
oriented, being specifically influenced by other countries.
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Source: MoL
This index was studied to observe the pattern of working factories in the period of 1990-2000 in
India. The base year taken for comparison in this decade was 1990.
There was an increase in this index during this period. One of the reasons was the economic
policy adopted at this time, where emphasis was on the development of the manufacturing sector
for the growth of the economy. The working factories index experiences a rise during 1990s .The
main reason behind this rise was the post-1991 new economic policy which emphasised on the
growth of the manufacturing sector.
After a steady rise and minor fluctuations, we see that there is sudden decline in the graph which
occurred due to the number of factories being closed down by force or loot.
Average Daily Employment Index (1990-2000)[Base 1990=100]
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Source MoL
The index studied with the help of the graph given above projected that the average daily
employment index is following the same pattern as that of working factories index.
Due to an increase in the number of factories during the periods from 1990 to 1996 and from
1997 to 1998, there is an increase in the employment level, and hence we witness a rise in the
graph of the average daily employment index. But with the closure of factories during 1998 to
2000, a high level of retrenchment occurred which is evident in the downward slope of the graph.
The various reasons for a dip in the level of employment are:
1.
2.
3.
Increase in outsourcing, i.e., work being routed out from the confines of factories
45
So basically we can say that there is no shortage of work, but only the typology has changed.
Mandays Lost due to Industrial Disputes (in thousands)
The data that is being projected through the graph given above is the number of man days lost
due to industrial disputes over a period from 1990 to 2004.
We can observe a steady upward climb in the number during the years 1990 and 1991. The
probable reason could be the advent of globalization in India that led to the emergence of a new
work culture. The dip during the period 1993 to 1998 shows that there must have been a decline
in the number of industrial disputes, which in turn resulted in lesser number of man days lost.
But after that period, there has been a constant increase in the number of man days lost due to
industrial disputes over the years, clearly indicating that the number of industrial disputes had
increased significantly.
Cause-Wise Comparison of Man Days due to Strikes and Lockouts
One can observe the strikes and lockouts during the years 2003 and 2004, as tabulated from a
detailed graph, available at the Ministry of Labour, Government of India website. This shall
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enable one to make a comparative analysis of the causes behind the loss of man days.
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From this graph, we can observe that the number of strikes and disputes due to monetary
factors was only 30% in the 1980s. By 1990s it reduced to 20% and in 2000 it was around 15%.
However, it can also be observed that after 2000, the issue of wages etc. is back as one of the
most important concern for strikes and lockouts. The factor of indiscipline however, remains the
most serious concern for strikes.
DISPUTES CLASSIFIED BY CAUSES (1990 1998)
The causes behind strikes and lockouts during the years 2003 and 2004 range from wages,
personnel issues, retrenchment due to business factors, indiscipline, leave issues, bonus and
incentives, union rivalry, working conditions etc. This can be illustrated in the form of the
following graph with respect to the years 1990 1998.
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We can represent the percentage distribution of disputes by causes taking the average of 2003-05
in the following manner:
Supreme Court has identified the difference between peaceful and violent strikers. This was done
to decide whether the peaceful strikers are entitled to receive any wages for the strike period.
In the S.C. Carbetta Case of 1962, the Supreme Court defined the provision for employers to
declare a valid lockout, in instances where there is a perceived possibility of workers damaging
the infrastructure, during the strike period.
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The lecture concluded with scanning the salient features of the state of Industrial Relations in
India. These can be enumerated as follows:
1. Congruence between certain industries and certain regions in contributing to higher
incidences of industrial conflicts.
2. Incidence of industrial conflicts in higher in regions of higher industrial growth
3. States like AP, Karnataka, Kerala, Rajasthan and TN together contributed more than 30%
to MDL
4. Maharashtra has reported decrease in MDL very recently.
5. Of late Industrial Disputes have come down specially in the post 90s but MDL and
workers involved in ID have shown an upward trend after 1998
6. Conflicts are of short duration, but this is debatable and depends on a host of factors.
7. Disputes due to monetary and personnel reasons have shown moderate level upward
trend (2004), on the contrary disputes due to indiscipline has shown marked increase
8. Disputes due to unclassified (small) reasons have shown an upward trend
9. Disputes in the public sector have declined whereas it remained static in private sector
recently. One of the reasons behind this is that, under normal circumstances, in PSUs, one
can not directly approach the courts, as he first needs to consult the Conciliatory Officer.
10. There has been sharp decline in MDL as well as production and wages loss in PSUs
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11. In the private sector although MDL has increased but wages loss and production loss
have been reduced.
12. Recognition of multiple unions is possible, but the registration of unions is a legal issue,
which differs from state to state within the Indian federation.
13. The discipline of Industrial Relations and its practitioners are not doing enough for the
90% of the work force, which lies in the unorganized sector.
14. In India, the concerns of labour welfare are considered to be only the responsibility of
employers. In contrast, in the West where the government participation and the
involvement of the workforce is significantly high.
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LECTURE 7
They act as a medium of communication between the workers and the management
They allow the workers to be organized and structured which would help them in their
daily activities
Moory report was published which contained details about the working conditions of
plants and the factories.
1881: The first Factories act came into being, (it is reviewed and modified every 10years). It
came into existence to tackle child labour.
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1884: A memorandum was drafted by N.M Lokhande and there were many issues that were
raised which are listed as under1. There should be a weekly rest day.
2. There should be a compulsory recess/break.
3. There should be defined working hours.
4. The workers should be paid wages, latest by the 15th of the next month.
5. Provision for compensation for injuries during work should be made
These demands were accepted by government by the government of India by applying
suitable legislations.
The 1st three demands were implemented in the Factories Act,
The 4th demand was implemented in the Payment of Wages Act
The 5th demand was implemented in the Workmens Compensation Act, 1924.
1891: Provided for women workers.
1905-1908:
A large number of strikes took place in this era and this period was recognized as
Individual
Power
Economic
Job
Regulation
Regulation
TISS HRMLR 2008-2010
Social
Change
Self
55
Fulfillment
In India, Politics cant be taken out of trade unions as they are driven by Political
parties.
Around 75,000 unions registered in India, Approx 3000 submitted their returns. Rest pay
annual penalty of Rs.5 and dont file returns. Hence Trade Unions are not fulfilling their
task [enterprise level unions]
Total Workforce : 411 Million [ 26 mln Organised & 382 mln Unorganised Sector]
Union Membership: 41 million
Unions are not declining but union membership is increasing. There is an increase in the
enrolment of Trade Unions so that the unorganized sector is also included.
EXAMPLES:
Pepsi-Mahul Plant: Workers wanted a union. Top management thought that a trade union would
reduce the productivity of the plant. But Mr.Devlekar with his experience in the Dukes Plant
thought differently, he spoke with the management and allowed a union to be formed. Later there
was a considerable increase in the productivity of the plant.
Asian Paints was about to close down, but the union came to the rescue and the problem was
resolved.
How you treat the members of the Union decides the relationship and trust level the
management has with them.
PROBLEMS OF TRADE UNIONS IN INDIA:
By and large organised sector specific. But this scenario is now changing as the organised
sector is becoming lesser available to them. [TU]
56
Only about 10% returns filed, rest pay the penalty as they are not active.
No counter strategies to things like right sizing. TUs in India, unlike Japan, do not do any
research.
Workers themselves are not interested in training & development. They take it as an
enjoyment and not as a capability opportunity. They are happy where they are to the
extent that they dont even want promotion [as it might lead to transfer].
Leaders are not very talented, educated o informed. Hence there is weak leadership.
During the 70s and 80s, Gate Meeting used to be a union gathering and it would be
housefull. But today only the top delegates of the union attend as they are being watched
by the HR function.
Some office bearers from outside: Till 1926 50% can be outsiders
E.g. Pepsi.
Size of Executives [Office Bearers] in Trade Unions
Size up to 10 :
33%
Size 11-20
22%
Size
>
21 45%
Up to Rs5/month:
20%
60%
Rs 10/month:
20%
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30%
<5
30%
>5
40%
JOURNEY:
1920-1930: New Industrial Culture [Factory System]. Unions were busy inculcating a new
culture
1930-1950:
Quality of life
Quality of life
Labour welfare
Housing
Canteen facilities
Medical Help
1950-1960:
1960-1965:
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1970-1980:
There were a lot of problems related to wages & bonuses. Hence, Payment of Wages
Act came into being.
1980 1990: Personnel Dept Transfer, Promotion, Org Citizenship.
After this period, there was a turn that was shifted. The functions and concerns moved into
another era. Due to Modernisation, Relocation was a patent trend as many companies started
restricting or redesigning.
1990 1995: Productivity, Pay for performance, LPG
1995 1999: Restructuring, Rationalization, VRS etc
Broad banding: merging salary bands judiciously thus making the organisation a flat
Organisation [combining different salary bands in the company]
1999-2000 Job Security and Re-Training
Compensation
Competency Mapping
Knowledge Management
DILEMMA OF TRADE UNIONS
Technologies displace jobs and yet enable the workers affected to bargain for higher
wages.
Unions resist closure of sick units but can hardly defend their being worked indefinitely
and losing enterprises. Eg. Kamani Enterprises Union helped the company to change
its status of bankruptcy to a profitable organisation.
Unions do not like MNCs,but theyre attracted by the higher emoluments and fringe
benefits they offer.
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Unions favour the growth of small industries, but do not like work of large units being
outsourced to small scale units. Eg Banks witnesses strikes that are against them getting
involved in mergers and outsourcing.
Good Governance
Public Image
Employers will continue to pressurize unions Multi Tasking, Work force etc.
Better performance of companies will invite more conflicts related to monetary aspects
Change in industrial concentration of labour force will give a new flavour to unions
there are sectorial changes and new sectors will emerge eg IT,ITES.
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Prefer Bilateralism [no third party conciliation officer]. They will try to settle things on
their own
CASE STUDY
A case study related to an IT company was discussed in class. This reputed IT Companys top
management were facing with a crude fact that there was a sudden dissatisfaction amongst their
blue collar employees which includes their personal assistants, office boy etc. Without any
warning from them, they were in the midst of joining hands with an external trade union. The
points pointed out while discussing this case are as follows:
Problems:
1. Disconnect
2. Discrimination
3. Dual System of Benefits
4. Less Opportunities
5. Dispensable
6. Lack Of Empathy
7. Lack of Standardisation
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LECTURE 8
E.Ramaswamy was the 1st person to think about white collar unions.
In the future, BPO or IT sector also might have managerial unions. The process of their
unionisation has already begun.
Officers association (OA)-is not exactly the same as trade unions. There is a huge
difference.
Changing profile of blue collar workers and officers association: Recently blue collar
workers have changed in terms of their approach and understanding .OA has also
changed from 70s to 2000, i.e. there is some rise in terms of maturity, leadership,
approach.
There is Trade Union Act (1926) for the blue collar workers but no act for OA. Most OA
are registered under Cooperative Society Act (1857) Thus there is no central act to protect
them. There is no grievance redressal system for them. There is no legal system in place
but they only want to show themselves as a collective force. OA basically helps bring the
officers and white collar employees together.
Some OAs are registered under trade unions act (1926) as they are not denied from
registration but they are not even encouraged by the central trade union organisations
.OAs do approach but the central trade unions limit themselves to the blue collar workers.
Every company should have its standing orders in place setting the guidelines of how the
employees should conduct themselves.
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2. UK:
Royal Commission of Labour supported managerial unions. The strategy to counter MU in UK is
individualised treatment to managers.
3. Germany:
As per one agreement in 1974 any company employing 2000 or more employees would allow
participation of managerial unions in co-determination system.
(Right to collective bargaining is prohibited in Singapore and Malaysia)
4. India:
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MU started in mid-sixties in PSUs HMT, HAL, ITI and they expanded in the 70s into oil, steel,
coal, and engineering sectors. They strengthened further in 1983 due to the Dearness Allowance
Issue, in 1986 due to wage revision and in 1991 due to New Economic Policy of the Government
(NEP)
REASONS FOR THE FORMATION OF MANAGERIAL UNIONS:
1. There was narrowing of wage differential. Workers were getting paid more as they had
trade unions bargaining for wage revision hence workers wages were revised more
frequently.
2. Eroding managerial control and decision-making:
There has been a change in work culture where managers are losing power as workers
want to supervise themselves.
3. Job Insecurity.
4. Threats from workers.
5. Bureaucratic culture:
FUNCTIONS OF OAs:
1. Protect, preserve and improve occupational interest of members.
2. Fight against stagnation.
3. Wage Revision.
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4. Grievance
redressal,
promotions,
transferring,
benefits,
performance
appraisal,
transportation.
5. Welfare
Benevolent Schemes.
Professional development of members.
Channel of communication-reliable feedback.
Major challenge faced by the OAs is Identity Crisis - i.e. how to behave, like a worker or a
manager. The dilemma on whether the managers should behave as representatives of owners in
OAs or whether the managers are a part of the working class. Basically the Managers are a third
force.
There is a difference between the OAs and trade unions with respect to the following aspects:
1. Goals or Objectives.
2. Nature of demands: Wage revision, welfare and pension.
3. Responsibility towards organization: They feel more associated or attached to the
organization. In the30 years in India, never have the officers done any property
damage or resorted to violent behaviour .Their approach is very decent. Leadership is
decent, comprises of learned people.
4. Statutory Protection.
5. Leadership.
A study was conducted by Baldev Raj Sharma of 40 organisations, 169 OAs, 7266 officers, 406
leaders in 1992.
According to the study the following observations were made:
1. Highest level of OA membership:
N
143
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General Managers
36%
DGM
15%
Senior managers
34%
Deputy Managers
6%
Executive Directors
4%
STATUS OF REGISTRATION:
Societies Act 1860
21%
Not registered
25%
54%
Maximum associations are not registered as they dont want to take legal action since
they are different from the blue collar workers and trade unions.
Supreme Court has given a verdict; it is the prerogative of the registrar of trade union to
decide if they want to register an OA under Trade Union Act 1926.
4%
31-40
26%
41-50
42%
51-60
28%
47%
53%
67
Profile of membership
(N=7266)
20-30
15%
31-40
28%
41-50
39%
51-60
18%
Profile of membership
Village
40%
Town
33%
City
27%
32%
Always
11%
Sometimes
41%
Never
16%
27%
Never
8%
Surely
65%
13%
A little
40%
Very much
9%
A good deal
38%
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LECTURE 9
Britannia Industries Limited has transformed itself from a sinking organization where people
were not cultured and Union -Management relations were sour to a disciplined and professional
company. Prior to Globalization there were just two bread brands (Modem and Britannia), hence
Britannia did not face much competition. But post Globalization, the Bread Industry was
deregulated and hence Britannia had to face competition from 30 brands.
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The change started from the sphere of people management when the HR head was made the unit
head of the company. The HR intervention was so useful that an HR personnel was made the
head of the organization. This was a rare case of someone from the HR function heading a
company.
ABOUT BRITANNIA COMPANY:
Incorporated in 1918.
Bread deregulation lead to the emergence of 30 more brands around the company.
The Distributors were given more commission by their competitors and they were
allowed to open the bread packets and sell loose, whereas Britannia did not allow its
distributors to open their packets.
The labour cost was high on account of high salaries paid to the workers in comparison to
their competitors. Delhi and Mumbai were the highest paying cities.
The Management decided to shift the Plant to outskirts of Delhi to reduce costs which
was opposed by the Union.
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The Management wanted to experiment with new products as Britannia Swiss Roll and
Britannia Half Cake which was again opposed by the workers due to lack of trust and
faith on their part.
The Management wanted to change the packaging of products from wax packing to poly
packing which was again met with hostile opposition.
The Union was concerned about the job security of all its workers leading to an
atmosphere of hostility and antagonism between Union and Management.
Intervention
Promotion]
Relocation of factory
Closure/Lockout
Contract Out
FINAL DECISION:
Shift Bread Plants to a contract scheme in a phased manner one by one. [Earlier the
Management had wanted one of the Bread Plants to be moved out to accommodate Italian
machinery. But the workers had opposed this move on account of paucity of faith in the
management.]
Enhance Productivity in all aspects (by reducing and eliminating wasteful practices).For
e.g. Introducing poly wrapping instead of wax packaging. The workers had not agreed to
the same, but the management fought tooth and nail to put forth this plan.
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Managers
Trade Unions
Labour Commissioner
PROCESS:
OUTCOMES:
1. Organizational Effectiveness:
Higher Profits.
Reduced Absenteeism
Gross Indiscipline.
Job Guarantee was assured by the Management wherein no worker would be retrenched
by the organization. [Even though 300 out of 500 workers were on bench for a duration
of one and half years, they were not given pink slips.]
Incentives and wages to be production based which was accepted by the Union.
Bread Plants were shifted to other locales. [Between 94- 98, 6 bread plants were
shifted]
Management had initiated a comprehensive social dialogue with the Union and workers.
MANAGEMENT
RELATIONS
(LMR)
CLIMATE-TRADE
UNIONS
OPINION:
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Every dimension as Cooperation, Regard for each other, Level of Trust, Friendliness and
Participation improved from the perspective of Union.
E.g. Pre-94 was a turbulent time. Post-94 Job guarantee was provided by the organization.
LABOUR
MANAGEMENT
RELATIONS
(LMR)
CLIMATE-TRADE
UNIONS
OPINION:
The same parameters improved for the Management also.
MAJOR ELEMENT OF CHANGE: SHIFT IN HR POLICIES
Creating a climate of trust, respect and team work was a priority for the HR function.
PEOPLE MANAGEMENT:
Increased Credibility, Discipline and Information Sharing with stress on Employee Core
Values at workplace.
The organization climate was improved through adept grievance handling and effective
participation of Union.
UNION MANAGEMENT:
Management provided a counter proposal to the Union which talked about higher
productivity in lieu of higher incentives.
The Trade Union was strengthened by being invited for talks and discussions. Union was
given due respect by the Management .There were three Unions prevalent. The
management took two Unions present at that time into consideration for all decisions,
though it was tough on the third one.
ORGANIZATIONAL PERFORMANCE:
IMPORTANT ISSUES:
The important issues to be considered are as follows:
Whether Unions are hurdles to effectiveness? [Many times in Britannia case, the Union
helped the Management. So it is finally the Management how it deals with the Union
that lays the path for future dealings.]
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Develop and Nurture Union-The management did not like the Union having their own
preferences.
Profile and Demography of workers indicated that the workers were mainly in the age
group of 20-25 years, so they were disengaged with monotonous work.
BAJAJ LOCKOUT:
Immediate Concerns: Lift Lockout, Resume Operations, Arrange Finances for Lockout
Short-Term: Recover financial Losses from Market.
Long-Term: Re-examine Personnel Policies, Review Expansion Plans, Reinforce Automation to
reduce employees.
SOME IMPORTANT ACTIONS:
Handling of Union.
LEARNINGS:
LECTURE 10
COLLECTIVE BARGAINING
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Collective bargaining is a group activity and it is mutually agreed process. Negotiation is the
exchange of set of information until you reach a conclusion. Collective bargaining is a bigger
exercise. The term was introduced in 1897. Following are some of the definitions and functions
of collective bargaining. Beauty of collective bargaining is that the two parties start recognizing,
respecting and trusting each other. It changes the conditions of labor.
Webbs, Sydney and Beatrice (1897),
1) Collective as one of the methods to maintain or improve the conditions of labour.
2) Collective bargaining is the collective equivalent of individual bargaining
3) Collective bargaining as economic process: takes most monetary issues which is not very
relevant today when collective bargaining encompasses non-monetary issues like
working conditions and employee welfare.
4) Collective bargaining is mostly used by trade unions.
ILO Convention No.98 (adopted on July 1, 1949, effective from July 8, 1951.)
Article 4
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Measures appropriate to national conditions shall be taken, where necessary, to encourage and
promote the full development and utilization of machinery for voluntary negotiation between
Employers or Employers Organization and Employees or Employees Organization with a view
to regulate terms and conditions of employment by means of Collective agreements
Collective Bargaining (CB) is a process of Decision making
Overriding purpose of CB is the negotiation of an agreed set of rules to govern the substantive
and procedural terms of the employment relationship, as well as the relationship between the
bargaining parties themselves (attitudinal structuring)
According to John T Dunlop CB is decision making process which discuss and decides terms of
employment. It brings about attitudinal changes wherein building of relationships is stressed on.
India
Article 19 (C)
ILO Convention 11 Agriculture Workers
Legal Provisions: Industrial Disputes Act (1947)
Section
2 (P)
Settlement
3. Firm level
In this the duration of CB varied during the course of time. Now in 90s CB results in
long term settlements. For e.g. 10 year settlement were signed to ensure job security.
Another e.g. could be the SATURN agreement -1985
80 % of workers will not be retrenched for next 5 years given that workers agree
to freeze a allowance/one time bonus and two tier wage- concession bargaining.
When industries are combined together it forms a sector and sectoral is not region wise but
industry could be region wise.
FUTURE TRENDS
Till 70s
1980
1990
Concession Bargaining
ADVANTAGES
Flexible method
Attitudinal restructuring
According to section 9A for any change in the condition of service 21 days notice has to be given
to the workers. e.g. If machinery is being handled by lesser number of people then 21 days notice
has to be given. Section 9A will not be applicable if you have a CB agreement signed by workers
representative.
8/205 conventions of ILO were taken as core conventions
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CONTENT OF CB
1. Substantive Rules Regulation of economic relations
Hours of work
Fringe benefits
Redundancy
Job evaluation
Union recognition
Joint Committees
Relocation of plants
Skill development
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